We propose a new co-evolutionary computational two-sector approach to the design of national innovation policy that recognizes the importance of inter-sectoral absorptive capacity constraints in innovation linkages between sectors in an economy. We show how the innovative capacity of an upstream...

We propose a stylized and tractable Neo-Schumpeterian model of sectorial transformations in which demand side knowledge constraints inhibit innovation diffusion and industrial change, causing structural instability. Evolutionary competition in the model implies that innovation can overshoot the...

We propose a stylized and tractable Neo-Schumpeterian model of sectorial transformations in which demand side knowledge constraints inhibit innovation diffusion and industrial change, causing structural instability. Evolutionary competition in the model implies that innovation can overshoot the...